ABA eyeing Quaker bldg. as new HQ

Quaker Tower, which next year will lose its namesake tenant and a large law firm that occupies several floors, has emerged as a leading candidate for the American Bar Assn.'s new headquarters.

Earlier this year, the ABA leaned toward building a new tower, soliciting proposals from developers and narrowing its choices to three sites in the West Loop, East Loop and River North. But an eleventh-hour pitch by the new owners of Quaker Tower persuaded the lawyers group to opt for the less costly route of settling in an existing building, real estate industry sources say.

The ABA will decide in the next two months between 35-story Quaker Tower and its current quarters at 750 N. Lake Shore Drive, according to people close to the situation.

But the ABA's current home isn't big enough, and the association leases about 76,000 square feet at the Time & Life Building. But sources say it would exchange that for 40,000 square feet at 680 N. Lake Shore Drive if it decides to stay in its present headquarters, which has some room for expansion.

If the ABA chooses Quaker Tower, it would lease about 240,000 square feet now occupied by Quaker Oats Co., which is moving late next year to a new West Loop building.

"It's easier to move into an empty building" than to have a new one constructed, says Joel Carlins, president of Chicago-based Magellan Development Group Ltd., which wanted the ABA to anchor a new office building in the Illinois Center complex just south of the Chicago River and east of Michigan Avenue. "The downside is, they can't have the customization a new building would offer."

The ABA's decision is good news for downtown landlords, who are seeing fewer new tenants because of the economic downturn and weren't relishing the prospect of a new building.

"(Leasing) activity across the board is flat right now," says Gregory L. Gerber, senior vice-president and managing director in the Strategic Advisory Group of Chicago developer John Buck Co. "A large transaction like this is certainly going to help the market a bit."

If Quaker Tower ends up landing the ABA, it will help justify Hines Interests L.P.'s $135-million purchase of the 850,000-square-foot building two months ago from Japan's Shuwa Corp. despite Hines' having had to re-lease virtually the entire structure in a slowing economy.

The other big tenant, law firm Gardner Carton & Douglas, is moving across the river to a new building that Houston-based Hines is developing at 191 N. Wacker Drive.

An executive in the Chicago office of Transwestern Commercial Services, which is representing 750 N. Lake Shore Drive owner Northwestern University, would say only that it had submitted a proposal to keep the association.

An ABA spokeswoman declined to comment.

Ultimately, the lawyers group will have to choose between cheaper rent at its current headquarters and paying more for the efficiency of a consolidated staff and a more visible and convenient location. In addition, the association, whose lease expires in 2004, almost assuredly would obtain naming rights to Quaker Tower, 321 N. Clark St.

Northwestern is able to offer the ABA a significantly lower rent, sources say, because of its exemption from real estate taxes. While the amount of the university's current offer couldn't be determined, the exemption is thought to be worth $7 or more per square foot.

But Hines has offered the ABA the two lower levels of Quaker Tower  below the lobby, with access to the Chicago River walkway  at a reduced rate, which sources say would bring the ABA's total net rent down to about $20 a square foot.